We’re closing in on all-time highs for the S&P 500 as the index just crossed above 1,500 for the first time since 2007. And although this was a shortened trading week due to the long weekend, the economic news has continued to come in—and most of it has been quite positive. Let’s take a look at a few of the details:

The Job Market

Last week, new jobless claims fell by another 5,000 to 330,000, which was another new five-year low. This was also again sharply below economists’ estimates of an annual rate of 355,000. Meanwhile, the four-week moving average dropped from 360,000 to 351,750.

As we saw last week, this was surprisingly good news and it certainly helps boost investor confidence. However, keep in mind that jobless claims may jump around a bit, and the latest data included estimated claims for California, Virginia and Hawaii, so we may see some significant revisions later on.

The Housing Market

We had two reports from the housing market this week—new home sales and existing home sales. Let’s take a look:

In December, sales of existing homes dipped 1% to a 4.94 million annual rate. This was somewhat unexpected, as economists had forecast that existing home sales would accelerate to a 5.1 million pace. Meanwhile, the National Association of Realtors revised its November report down from 5.04 million to 4.99 million.

At face value, this report didn’t look very good, but that first impression couldn’t be farther from the truth. 2012 was still the best year for U.S. home sales in five years, with the annual rate rising 9.2% over 2011. Over the same period, the national median existing home price jumped 6.3% to $176,600. So it’s clear that the housing recovery is alive and well.

In addition, In December, new home sales fell 7.3% from the previous month to an annual rate of 369,000. While this came in below the 385,000 consensus estimate, home sales remain at the highest level in several years.

Generally, the seasonality of the housing market means that inventory often falls in December and picks up again in the first quarter in anticipation of the spring selling season, so I’m not too worried about this dip. Supporting this, the November sales numbers were revised up to 398,000, for 9.3% growth—more than double than the initial announcement of 4.4% growth.

Overall, it’s clear that housing is on the mend and new home building is expected to boost the U.S. economy in 2012 for the first time in seven years. We have a number of ways to play the turnaround in housing in my Emerging Growth Buy List, and I see strong upside for these stocks.